Texas House Bill HB217

Texas 2023 - 88th Regular

• Filed: 11/14/22

Caption

Relating to the limitation on the amount of a subcontractor's lien for labor or materials.

Impact

The proposed changes in HB 217 are expected to have significant implications for state laws regarding construction contracts and subcontracting practices. By standardizing the limits on subcontractor liens, the bill could help prevent overly burdensome claims that can disrupt ongoing projects and create complications in the construction industry. The bill applies only to original contracts entered into after its effective date, preserving previous laws for existing contracts, ensuring a smooth transition while respecting previously established agreements.

Summary

House Bill 217 aims to limit the amount that a subcontractor can claim as a lien for labor or materials provided in a construction project. The bill specifies that a subcontractor's lien cannot exceed the lesser of either a calculation based on the subcontract price in relation to the work performed and materials provided, or the remaining balance after considering previous payments received. This legislation is intended to provide clarity and fairness in the lien process, while also protecting contractors from excessive claims that may threaten their financial stability.

Sentiment

The sentiment among stakeholders appears to be cautiously optimistic, with many industry professionals supporting the need for clearer guidelines on subcontractor claims. Proponents argue that the bill will help facilitate better financial planning and reduce conflicts related to lien claims. However, some concerns have been raised about whether the proposed limits may undermine the ability of subcontractors to effectively secure their rights, particularly in complex construction projects where the financial stakes are high.

Contention

Notable points of contention surrounding HB 217 include discussions on the balance between protecting subcontractor rights and ensuring that contractors are not unduly exposed to significant financial claims. Some critics argue that while the bill may simplify lien processes, it could unintentionally restrict subcontractors' recourse in cases where they may be justly owed compensation beyond the proposed limits. The debate emphasizes the need to find an effective balance in construction law that supports both contractors and subcontractors.

Texas Constitutional Statutes Affected

Property Code

• Chapter 53. Mechanic's, Contractor's, Or Materialman's Lien
  • Section: 024